US Sues To Block United Getting Newark Slots

The US Justice Department is suing to stop United Airlines from acquiring 24 takeoff and landing slots at Newark Liberty Airport from Delta Air Lines.

"There are 35 million air passengers who fly into and out of Newark every year. And we know that airfares at Newark are among the highest in the country while United's service at Newark ranks among the worst," said Assistant Attorney General Bill Baer.

"This transaction will reduce competition by removing from the hands of a competitor, in this case Delta, a scarce resource that it needs to compete with United at Newark."

The lawsuit, filed in US District Court for New Jersey in Newark, alleges that the acquisition would lead to higher fares and fewer choices.

But United said it will "vigorously defend our ability to operate effectively, efficiently and competitively at Newark" and that the transaction "benefits our customers and the region by enabling us to enhance service at our Newark hub and manage congestion at the airport."

In essentially a swap, Delta took over United's slots at New York's JFK Airport and then United planned to acquire Delta's slots at Newark, where it is making a USD$2 billion investment to provide customers with access to connecting flights, new restaurants and technology displays. United ended its JFK service after seven years of failing to profit.

"Delta's agreement to lease slots at Newark to United, the focus of the Department of Justice lawsuit announced today, is an independent transaction and does not affect Delta's separate agreement to lease slots from United at New York JFK Airport," said Delta spokesman Trebor Banstetter in a statement.

Delta began flights with the JFK slots on November 1.

The Justice Department said that United already controls 73 percent of the slots at Newark. It also said United allegedly "grounds" up to 82 slots each day at Newark, limiting flight opportunities.

The federal government has been concerned about a possible monopoly since 2010, when United divested 36 slots to Southwest Airlines to help win approval of its merger with Continental Airlines.